Grandfathered health plan FAQs

Question:  What can you tell me about “grandfathered” health plans and how that may impact my company’s health insurance plan?

Answer: On June 14, the Internal Revenue Service, along with the Departments of Labor and Health and Human Services released the interim final rules for grandfathered plan provisions of the Patient Protection and Affordable Care Act (PPACA). All employer sponsored group health plans that were in effect on March 23, 2010 are impacted.

The regulations, published in the Federal Register on Thursday, June 17, 2010 provide some clarification on whether or not your health plan can maintain “grandfathered” status, as well as the applicability of the “grandfathering” rules to collectively bargained plans.  Generally, the regulations are applicable for plan years beginning on or after September 23, 2010, when many of the market reforms take effect.  The regulations also confirm that retiree-only plans are exempt from certain PPACA requirements.

The Patient Protection and Affordable Care Act exempts certain health plans that were in existence on March 23, 2010 –“grandfathered plans” from many new requirements, including benefit mandates, caps on out-of-pocket expenses, limits on age-based premiums, and other consumer protections.

So, what does this really mean to your health plan?  Group health plans that were in existence on  March 23, 2010 are grandfathered – meaning they do not yet have to comply with some, but not all, of PPACA’s mandates. Including:

Ø  Coverage for certain preventive health services without imposing cost-sharing requirements.

Ø  The PPACA puts the following rules in place for patients: 

Plans that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children). 

Plans that provide emergency services may not impose preauthorization or increased cost-sharing for emergency services (in or out of network). 

Plans that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for obstetrical/gynecological care.

Ø  Fully insured plans must satisfy the requirements of Internal Revenue Code section 105(h)(2). That section provides that a plan may not discriminate in favor of highly compensated individuals as to eligibility to participate and that the benefits provided under the plan may not discriminate in favor of participants who are highly compensated individuals.


Ø  Within two years of the date of enactment (March 23, 2010), reporting requirements will be developed for group health plans and health insurance issuers offering group or individual health insurance coverage. The reports will relate to benefit and reimbursement structures that are designed to improve health outcomes, prevent hospital readmissions, improve patient safety, reduce medical errors and implement health and wellness activities.


Ø  Group health plans and health insurance issuers offering group or individual health insurance coverage must implement an effective appeals process for appeals of coverage determinations and claims.

Effective for plan years beginning on or after January 1, 2014
Premiums charged for health insurance coverage in the individual or small group market may not be discriminatory and may vary only by

New poll finds SBAM is Michigan’s most trusted business group to help improve economy

The Small Business Association of Michigan (SBAM) is the most trusted business organization to help improve Michigan‘s economy, according to a recent survey of southeast Michigan voters. SBAM tops a list of seven business groups noted in the poll conducted by Denno Noor Research for The Rossman Group and The Perricone Group.

"I think these survey results offer vivid proof that citizens trust small business owners and have confidence in the organization that represents them,” says SBAM President and CEO Rob Fowler. “Entrepreneurs are well known in their communities and demonstrate every day that they are working to build employment and help propel Michigan in a new economic direction. Here at SBAM we champion that effort and provide a voice for the entrepreneurial spirit.”

The 600-sample poll of Macomb, Oakland and Wayne County voters was conducted from May 22 to May 24. The margin of error is +/- 4 percent.


Take the Innovation & Entrepreneurship Needs Assessment Survey

SBAM is partnering with Lawrence Technological University to encourage our membership to participate and take the Innovation & Entrepreneurship Needs Assessment Survey sponsored by a U.S. Department of Commerce, Economic Development Administration grant.

The aim of this project is to identify the availability of, and gaps in, resources needed by individuals (including displaced workers, entrepreneurs, innovators, researchers, small business owners, venture capitalists, corporate R&D, and business support organizations) that are critical to spur innovations, entrepreneurship and new business creation in Michigan.

Once you have completed the survey (, feel free to encourage your network of business partners and colleagues to do the same.

Surveys will be collected through mid-June.

Please note:  Your participation in this survey is completely voluntary. There are no right or wrong answers and you may stop at any time. All answer will remain completely anonymous, and you do not have to answer any question. The survey is comprised of 7 sections and can be completed in approximately 10-15 minutes.


(Audio) Small Business Champion Podcast: SBAM small business leaders go to Washington, D.C.

Eight Michigan small business leaders were in Washington, D.C., this week to talk to congressional representatives about key issues important to entrepreneurs, including healthcare, the 1099 forms issue, the estate tax and the new small business tax package. David Palsrok, the Small Business Association of Michigan’s vice president government relations, tells Michael Rogers about the small business mission to the nation’s capitol.  Click here to listen.


Center for Michigan conducts first of three “Great Debates 2010” – see the video here!

Gubernatorial candidates Pete Hoekstra, Rick Snyder, and Tom George waged a spirited but civil debate on state tax reform, budget cuts, prison and health care spending on May 25 in Grand Rapids. The debate was organized and conducted by the Center for Michigan and co-sponsored by the Small Business Association of Michigan. Watch a video of the debate here.

A similar Democratic gubernatorial debate will be held July 15 in Wixom. A third debate will be held this fall between the Republican and Democratic gubernatorial nominees.

The Center for Michigan also plans to feature 30-minute debates in 50 competitive races for the Michigan House and Senate. The legislative debates will be scheduled between August and October. All debates will be taped in studio without a studio audience. All debates will be moderated by professional journalists. Public television stations throughout Michigan will broadcast the Great Debates. Each debate will also be available for "on demand" viewing on this page and at

You can see six of the gubernatorial candidates – State Senator Tom George, Lansing Mayor Virg Bernero, Oakland County Sheriff Mike Bouchard, Attorney General Mike Cox, Congressman Pete Hoekstra and businessman Rick Snyder – live onstage at the Small Business Association of Michigan’s annual meeting in East Lansing on June 24. The candidates will present their visions for growing the business economy and returning the state to prosperity.

The annual meeting will be take place 11:30 a.m. to 1:30 p.m. at the Kellogg Hotel & Conference Center. Tickets may be purchased online here or by calling (800) 362-5461.

New Forum topic: Can your small business take advantage of the 14 "Grand Challenges for the 21st Century"?

Contributed by Mark H. Clevey, MPA, Director of Entrepreneurship & Commercialization, Saginaw Valley State University, CBED


  • The 14 Grand Challenges are:
  • Make solar energy economical;
  • Provide energy from fusion;
  • Develop carbon sequestration methods;
  • Manage the nitrogen cycle;
  • Provide access to clean water;
  • Restore and improve urban infrastructure;
  • Advance health informatics;
  • Engineer better medicines;
  • Reverse-engineer the brain;
  • Prevent nuclear terror;
  • Secure cyberspace;
  • Enhance virtual reality;
  • Advance personalized learning;
  • Engineer the tools of scientific discovery.

    How will your small business take advantage of these "Grand Challenges"? Tell us in our Forum!